News and Posts

If you don’t have enough federal tax withheld from your paychecks and other payments, you may have to make estimated tax payments. This is the case if you receive interest, dividends, self-employment income, capital gains or other income. Here are the applicable rules for paying estimated tax without triggering the penalty for underpayment. When are the payments due? Individuals must pay 25% of a “required [...]

The Creating Helpful Incentives to Produce Semiconductors for America Act (CHIPS Act) was recently passed by Congress and signed into law by President Biden as part of the CHIPS and Science Act of 2022.  Among other things, the $52 billion package provides generous tax incentives to increase domestic production of semiconductors, also known as chips. While the incentives themselves are narrowly targeted, the expansion of [...]

As businesses and not-for-profit entities increasingly rely on technology, cyberthreats are becoming more sophisticated and aggressive. Auditors must factor these threats into their risk assessments. They can also help you draft cybersecurity disclosures and brainstorm ways to mitigate your risk of an attack. Increasing risks How much does a data breach cost? The average has reached an all-time high of $4.35 million, according to the [...]

The U.S. Senate and House of Representatives have passed the Inflation Reduction Act (IRA). President Biden is expected to sign the bill into law shortly. The IRA includes significant provisions related to climate change, health care, and, of course, taxes. The IRA also addresses the federal budget deficit. According to the Congressional Budget Office (CBO), the IRA is projected to reduce the deficit by around [...]

Auditors commonly use confirmations to verify such items as cash, accounts receivable, accounts payable, employee benefit plans and pending litigation. Under U.S. Generally Accepted Auditing Standards, an external confirmation is “a direct response to the auditor from a third party either in paper form or by electronic other means, such as through the auditor’s direct access to information held by a third party.” Some companies [...]

Taxpayer identity theft is alive and well. However, progress has been made in combating this crime. The IRS, state agencies and tax professionals urge taxpayers to protect themselves with an Identity Protection PIN (IP PIN). This 6-digit number must be requested from the IRS and is renewed each year. The number must be entered on your tax return upon filing. The IRS explained that “the [...]

If the proposed Inflation Reduction Act is passed, domestic manufacturers could bear the brunt, warns one lawmaker. U.S. Senator Mike Crapo (R-ID), a member of the Senate Finance Committee, cited analysis by the Joint Committee on Taxation (JCT). While the JCT projects that only about 150 taxpayers annually will be subject to the 15% book minimum tax in the bill, it also estimated that 49.7% [...]

The Affordable Care Act’s (ACA’s) affordability percentage for employers to avoid a shared responsibility payment (penalty) is decreasing in 2023. The ACA’s employer-shared responsibility provision requires applicable large employers to offer minimum essential coverage that’s “affordable” and that provides “minimum value” to full-time employees or potentially make an employer-shared responsibility payment to the IRS. Health insurance coverage is considered “affordable” to an employee if the [...]

A proposal to appropriate $80 billion over 10 years to the IRS is back on the table as part of the Inflation Reduction Act. (It was originally included in the Build Back Better bill.) The funds would be available to the IRS through Sept. 30, 2031, across four areas of the agency. First, nearly $3.2 billion would help improve taxpayer services. Second, $45.6 billion would [...]

These days, most businesses have websites. But surprisingly, the IRS hasn’t issued formal guidance on when website costs can be deducted. Fortunately, established rules that generally apply to the deductibility of business costs provide business taxpayers launching a website with some guidance as to the proper treatment of the costs. Plus, businesses can turn to IRS guidance that applies to software costs. Hardware versus software [...]

When you filed your federal tax return this year, were you surprised to find you owed money? You might want to change your withholding so that this doesn’t happen again next year. You might even want to adjust your withholding if you got a big refund. Receiving a tax refund essentially means you’re giving the government an interest-free loan. Adjust if necessary Taxpayers should periodically [...]

When professional auditors review a not-for-profit’s books, they usually spend significant time on revenue. Inadequate revenue — or revenue trending in the wrong direction — can provide an early warning of future trouble. But you don’t have to wait for your next audit to assess revenue. You can employ the same techniques an auditor uses to monitor your organization’s financial health. Contributions and grants Start [...]

A spending policy is the formula used to determine how much of the value of investments a nonprofit organization will tap each year for such expenses as operating costs and capital projects. Although it’s usually a good idea to stick with an established spending policy, circumstances may warrant changes. There’s no one-size-fits-all optimal spending policy. But five general types have emerged — each with pros [...]

Can you spot a fake IRS employee? Many people tremble at the thought of hearing from the IRS. That fear can make them vulnerable to scams that seek to steal their assets or identities. To combat IRS impersonator scams, the IRS has created a fact sheet explaining how it contacts taxpayers. The first contact is not by text or email. Usually, the first contact is [...]